What life is really like in the most expensive place in the US, where the typical home costs $1 million and it feels like everyone works in tech

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  • San Jose-Sunnyvale-Santa Clara, California, is the most expensive metro area in the US.
  • San Jose is the bona fide capital of Silicon Valley.
  • About one-quarter of households earn over $200,000 a year, but that still may not be enough to buy a median-priced home.
  • Meanwhile, an affordable housing shortage has left thousands of working San Jose residents homeless.

Outsiders may consider San Francisco synonymous with Silicon Valley, but locals know the epicenter of tech culture is San Jose.

The metro area defined by the US Census as San Jose-Sunnyvale-Santa Clara is the proverbial heart of Silicon Valley - and the most expensive place to live in the US. Goods and services are about 27% more expensive than the national average in San Jose, and the median home sale price is over $1 million.

But San Jose isn't all engineers and programmers flush with cash (or stock options). A dire affordable housing shortage has left teachers, landscapers, security officers, and thousands of minimum-wage workers virtually homeless.

Here's a look inside San Jose:

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The San Jose-Sunnyvale-Santa Clara metro is home to nearly two million people.

The San Jose-Sunnyvale-Santa Clara metro is home to nearly two million people.

Two counties make up the metro area: Santa Clara and San Benito.

Two counties make up the metro area: Santa Clara and San Benito.

It's the second-most populous metro in the Bay Area behind San Francisco-Oakland-Hayward, which is often synonymous with Silicon Valley and tech culture.

It's the second-most populous metro in the Bay Area behind San Francisco-Oakland-Hayward, which is often synonymous with Silicon Valley and tech culture.

But to locals, San Jose is the epicenter of Silicon Valley. Its sprawling suburbs are home to employees of the biggest tech companies ...

But to locals, San Jose is the epicenter of Silicon Valley. Its sprawling suburbs are home to employees of the biggest tech companies ...

... like Google in nearby Mountain View ...

... like Google in nearby Mountain View ...

... Facebook in Menlo Park ...

... Facebook in Menlo Park ...

... and Apple in Cupertino, a city west of San Jose.

... and Apple in Cupertino, a city west of San Jose.

Cisco Systems and eBay, both headquartered in the city of San Jose, are also two of the area's biggest employers.

Cisco Systems and eBay, both headquartered in the city of San Jose, are also two of the area's biggest employers.

Source: PayScale

"Everyone you meet is directly working in tech, working for a tech startup, or working for a company that funds technology companies," Julia David, a 25-year-old contract employee at PayPal and MBA student at San Jose State University, told Business Insider.

"Everyone you meet is directly working in tech, working for a tech startup, or working for a company that funds technology companies," Julia David, a 25-year-old contract employee at PayPal and MBA student at San Jose State University, told Business Insider.

But that doesn't mean everyone has a technology job, she said. "While engineers and programmers mostly dominate the population, people often forget that there are a lot of other positions in a tech company," said David, who works on PayPal's social innovation team.

But that doesn't mean everyone has a technology job, she said. "While engineers and programmers mostly dominate the population, people often forget that there are a lot of other positions in a tech company," said David, who works on PayPal's social innovation team.

"Some of my friends are engineers, but I also have a lot of friends in finance, accounting, marketing, you name it," David said.

"Some of my friends are engineers, but I also have a lot of friends in finance, accounting, marketing, you name it," David said.

David said "one of the biggest positives" of the tech industry is the "economic stability" it brings — high-paying jobs and an ever-growing demand for tech talent keep the job market strong.

David said "one of the biggest positives" of the tech industry is the "economic stability"  it brings — high-paying jobs and an ever-growing demand for tech talent keep the job market strong.

San Jose's economy is the fastest-growing in the US, and tech is a huge driver. In 2017, the area's GDP grew 7.6%, to more than $275 billion or $137,752 per capita.

San Jose's economy is the fastest-growing in the US, and tech is a huge driver. In 2017, the area's GDP grew 7.6%, to more than $275 billion or $137,752 per capita.

Sources: BLS, American Community Survey, MarketWatch

The unemployment rate in the San Jose metro was 2.5% as of December 2018, compared to 3.9% nationally.

The unemployment rate in the San Jose metro was 2.5% as of December 2018, compared to 3.9% nationally.

Sources: BLS, American Community Survey

San Jose's most popular jobs include mechanical engineer, software engineer, and senior software engineer, according to PayScale. They pay anywhere between $77,268 and $134,718 a year.

San Jose's most popular jobs include mechanical engineer, software engineer, and senior software engineer, according to PayScale. They pay anywhere between $77,268 and $134,718 a year.

Source: PayScale

More than half (57%) of all households in the San Jose metro earn six figures — the median household brings in $117,474 a year.

More than half (57%) of all households in the San Jose metro earn six figures — the median household brings in $117,474 a year.

About one-quarter of households earn over $200,000 a year ...

About one-quarter of households earn over $200,000 a year ...

... but that's still not enough to buy a house.

... but that's still not enough to buy a house.

Many residents, including David's family, have been around since the dot-com boom of the 1990s ...

Many residents, including David's family, have been around since the dot-com boom of the 1990s ...

... but the area's skyrocketing home prices have pushed many others out.

... but the area's skyrocketing home prices have pushed many others out.

Over the last 10 years, the median home value in the San Jose metro has more than doubled from $612,000 to $1.27 million.

Over the last 10 years, the median home value in the San Jose metro has more than doubled from $612,000 to $1.27 million.

Source: Zillow

Over that same time period, the median sale price jumped from $431,000 to $1.05 million.

Over that same time period, the median sale price jumped from $431,000 to $1.05 million.

Source: Zillow

Meanwhile, the US median sale price increased marginally, from $163,000 to $226,000.

Meanwhile, the US median sale price increased marginally, from $163,000 to $226,000.

Source: Zillow

In San Jose, buyers need an annual income of at least $257,247 to qualify for a mortgage with 20% down, according to the National Association of Realtors' latest data.

In San Jose, buyers need an annual income of at least $257,247 to qualify for a mortgage with 20% down, according to the National Association of Realtors' latest data.

Source: National Association of Realtors

About 70% of San Jose homeowners have a mortgage, and they spend about $3,261 on monthly housing costs, which includes taxes, insurance, and utilities.

About 70% of San Jose homeowners have a mortgage, and they spend about $3,261 on monthly housing costs, which includes taxes, insurance, and utilities.

Source: US Census American Community Survey

About 46% of homes in the San Jose metro are valued at more than $1 million.

About 46% of homes in the San Jose metro are valued at more than $1 million.

Source: US Census American Community Survey

Last year, San Jose suburbs appeared in nine of 10 spots on Redfin's ranking of the hottest neighborhoods in America. The annual list tracks which areas have seen a rising interest from buyers.

Last year, San Jose suburbs appeared in nine of 10 spots on Redfin's ranking of the hottest neighborhoods in America. The annual list tracks which areas have seen a rising interest from buyers.

Source: Redfin

But San Jose doesn't make an appearance in the top 10 this year, as more residents migrate out of expensive coastal cities, according to Redfin.

But San Jose doesn't make an appearance in the top 10 this year, as more residents migrate out of expensive coastal cities, according to Redfin.

Source: Redfin

At the metro level, Los Altos, a city in Santa Clara County, was named San Jose's hottest neighborhood for 2019.

At the metro level, Los Altos, a city in Santa Clara County, was named San Jose's hottest neighborhood for 2019.

Source: Redfin

Nearly 63% of homes in Los Altos sold for above asking price in November, according to the latest data available from Redfin.

Nearly 63% of homes in Los Altos sold for above asking price in November, according to the latest data available from Redfin.

Source: Redfin

Properties in Los Altos are palatial by California standards. The median sale price is just under $3 million.

Properties in Los Altos are palatial by California standards. The median sale price is just under $3 million.

Rent prices are outsized, too. Between November 2010 and January 2019, median rent for a one-bedroom apartment rose from $1,520 to $2,565.

Rent prices are outsized, too. Between November 2010 and January 2019, median rent for a one-bedroom apartment rose from $1,520 to $2,565.

Source: Zillow

"Downtown San Jose is expensive and can be unaffordable if you live in a major apartment complex or if you choose to live alone, but rent can be thousands of dollars cheaper in San Jose than it is in San Francisco," David said.

"Downtown San Jose is expensive and can be unaffordable if you live in a major apartment complex or if you choose to live alone, but rent can be thousands of dollars cheaper in San Jose than it is in San Francisco," David said.

There is relief for renters who know where to look, she added. David and a roommate split $2,800 monthly rent for a two-bedroom, two-bathroom apartment with access to a pool, gym, and recreation classes. It's just a few blocks from downtown San Jose.

There is relief for renters who know where to look, she added. David and a roommate split $2,800 monthly rent for a two-bedroom, two-bathroom apartment with access to a pool, gym, and recreation classes. It's just a few blocks from downtown San Jose.

A San Jose landlord drew criticism earlier this year when Mercury News reported he rents out a studio apartment on his property to a friend's two cats for $1,500 a month.

A San Jose landlord drew criticism earlier this year when Mercury News reported he rents out a studio apartment on his property to a friend's two cats for $1,500 a month.

Sources: San Jose Mercury News, Business Insider

With many non-tech employees struggling to afford the exorbitant cost of housing, some people found the story absurd. A housing expert working to end homelessness in the area called it "peak Silicon Valley."

With many non-tech employees struggling to afford the exorbitant cost of housing, some people found the story absurd. A housing expert working to end homelessness in the area called it "peak Silicon Valley."

Sources: San Jose Mercury News, Business Insider

Nearly 47% of renters in the San Jose metro, representing a plurality, spend 30% or more of their income on rent. The US Census considers these households "burdened."

Nearly 47% of renters in the San Jose metro, representing a plurality, spend 30% or more of their income on rent. The US Census considers these households "burdened."

Source: US Census American Community Survey

Thousands of teachers, landscapers, security officers, and minimum-wage workers who can't afford rent have created a new economic class in Silicon Valley: working homeless.

Thousands of teachers, landscapers, security officers, and minimum-wage workers who can't afford rent have created a new economic class in Silicon Valley: working homeless.

Source: Business Insider

About 3% of San Jose residents live in mobile homes, vans, RVs, or on boats.

About 3% of San Jose residents live in mobile homes, vans, RVs, or on boats.

Source: Business Insider

"In San Jose, you will find glassblowers, hairdressers, soon-to-be-grandpas, grocery-store clerks, security guards and local activists, many of whom would leave this city if they could, but are bound by duty to aging parents or custody terms, living paycheck to paycheck and hoping to make ends meet," Meg Furey wrote for The Bold Italic, a San Francisco-based culture magazine.

"In San Jose, you will find glassblowers, hairdressers, soon-to-be-grandpas, grocery-store clerks, security guards and local activists, many of whom would leave this city if they could, but are bound by duty to aging parents or custody terms, living paycheck to paycheck and hoping to make ends meet," Meg Furey wrote for The Bold Italic, a San Francisco-based culture magazine.

Source: The Bold Italic

But it's not just housing costs eating up paychecks. San Jose's cost of living is the highest of any metro in the US. As of 2016, goods and services were about 27% more expensive than the national average.

But it's not just housing costs eating up paychecks. San Jose's cost of living is the highest of any metro in the US. As of 2016, goods and services were about 27% more expensive than the national average.

Source: Business Insider via Bureau of Economic Analysis

In spite of its high cost of living, US News & World Report ranked San Jose No. 17 out of 125 metro areas on its 2018 annual best places to live in America list ...

In spite of its high cost of living, US News & World Report ranked San Jose No. 17 out of 125 metro areas on its 2018 annual best places to live in America list ...

Source: US News & World Report

... but that's a far cry from its No. 3 ranking the year before. It's still the top-ranked city in California on the list.

... but that's a far cry from its No. 3 ranking the year before. It's still the top-ranked city in California on the list.

Source: Mercury News

And though San Jose has cemented its status as a hotbed for innovation and entrepreneurship, "not everyone here is consumed by capitalist pursuits," according to Furey.

And though San Jose has cemented its status as a hotbed for innovation and entrepreneurship, "not everyone here is consumed by capitalist pursuits," according to Furey.

Source: The Bold Italic

San Jose State University, the founding campus of the California State University system, is located downtown. It had about 35,000 students enrolled last fall.

San Jose State University, the founding campus of the California State University system, is located downtown. It had about 35,000 students enrolled last fall.

Source: San Jose State University

The university's top undergraduate program by enrollment is psychology, while the most popular graduate program is library and information sciences, followed by software engineering.

The university's top undergraduate program by enrollment is psychology, while the most popular graduate program is library and information sciences, followed by software engineering.

Source: San Jose State University

"In fact," Furey wrote, "even though San Jose is the tenth most populous city in the United States, it will rarely seem that way, as the streets are almost always empty, giving many areas the feeling of a place forgotten by time and strangely preserved."

"In fact," Furey wrote, "even though San Jose is the tenth most populous city in the United States, it will rarely seem that way, as the streets are almost always empty, giving many areas the feeling of a place forgotten by time and strangely preserved."

Source: The Bold Italic

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